Option Trading

✅ What is an Option?
An Option is a financial contract between a buyer and seller based on an underlying asset (stock, index, commodity).

Call Option = You have the right to Buy.

Put Option = You have the right to Sell.

You pay a premium to buy this right. You are not obligated, but you have the option to buy/sell.

✅ Example (Simple):
You buy a Call Option on Reliance at ₹2500 strike price, paying ₹50 premium.

If Reliance goes to ₹2600, you profit (your option value increases).

If Reliance stays below ₹2500, you lose only ₹50 (the premium)

Types of Options
Call Option – Profit when the market goes up.

Put Option – Profit when the market goes down.

ITM (In the Money) – Strike price already profitable.

ATM (At the Money) – Strike price close to current market price.

OTM (Out of the Money) – Strike price away from market price

✅ Advantages of Option Trading
✅ Less Capital Needed
✅ Limited Risk (when buying)
✅ High Profit Potential
✅ Profit in All Market Types (up, down, sideways)

✅ Risks in Option Trading
❗ Premium can expire worthless (buyer loses money)

❗ Selling options carries unlimited risk (if done without strategy)

❗ Time Decay – value of options reduces as expiry nears

✅ Option Trading is Best for:
✅ Traders with small capital
✅ Stock market learners
✅ Part-time traders
✅ People who want to hedge portfolios

✅ Final Summary:
Option Trading is a smart way to participate in the market using strategies, risk control, and leverage. Start with Call and Put basics, then learn strategies like covered calls, spreads, and hedging to master the gam